Sensible pricing helps GSK in India, says CEO

Pointing out that India and the UK should collaborate on “regulatory harmonisation” to iron out manufacturing issues which domestic companies have faced, he said this is important as the world has a big dependence on the supply chain in India.Rupali Mukherjee | TNN | Updated: November 09, 2016, 08:21 IST

Mumbai: At a time when the government is planning to dismantle the drug pricing regulator, NPPA, and delink price control from essential medicines, one of the largest companies in the world, GlaxoSmithKline, has rallied around the country’s regulatory regime. Saying “India should be concerned about pricing” to ensure that its people “get access to decent healthcare”, GlaxoSmithKline global CEOAndrew Witty said one of the reasons his company remains among the biggest in India is because of the company’s strategy of “sensible pricing”.

Pointing out that India and the UK should collaborate on “regulatory harmonisation” to iron out manufacturing issues which domestic companies have faced, he said this is important as the world has a big dependence on the supply chain in India. There is a tremendous opportunity to collaborate on regularisation harmonisation, which could be for beneficial for both the UK and India, and benefit companies. There have been issues (in factories) in terms of “falling short in regulatory standards”, which can be improved, he said here on Tuesday.“Price controls do not worry me, and I’m not arguing with the government system,” he told TOI, adding only a “bit of predictability” needs to be there so that companies can plan better and avoid shortages in the market. He said he was pleased with the “pragmatic approach” and recent steps taken by the government in terms of intellectual property.

“The reason that GSK as an MNC remains one of the biggest companies in India is because we’ve had a long-standing history of sensible pricing — not the lowest, but not at prices unaffordable by anybody in India. What’s that meant if you look at GSK in emerging markets (Asia, India, Latina, Africa), although we are not the biggest revenue company, we have 40% more volume than any other company. We are focused on delivering a reasonable price for our innovation, which then gives us huge volumes. From a business economic point of view, we are very open-minded, whether we receive our income through price or volume, you can achieve it both ways,” he said, adding that it’s sensible to have a solidarity strategy (with people) to create sensible access at reasonable price.

He said the company’s roll-out of its sales and marketing programme globally last year has been successful and increased “trust”. Under this, its sales representatives do not have individual sales targets.

Drug and vaccine costs are relatively a small fraction of the total healthcare cost, maybe around 10-12 %, despite that they get a lot of focus since they are a procured item. “As people get economically active and move up, we want to be there — we are selling products less than a rupee a day, we deliver breakthrough treatment for respiratory disease, leading-edge research in cancer.”

In terms of its vaccines portfolio, he said GSK has 34 vaccines — biggest in the world, including paediatric, meningitis, and for some common childhood diseases. It has invested enormously in vaccine manufacturing capacity, in modernising, expanding, and in the process of manufacturing. So with its “extremely vibrant portfolio of breakthrough vaccines, investments in modern capacity, and price strategy”, it is making a huge impact in reducing under-5 mortality rates.

“We are committed to bringing our prices down according to manufacturing efficiency as volume demand goes up, cost per unit goes down,” he said. In India, there has been very good progress in development of a private market in vaccines, and “we can offer best price we possibly can” in the states’ vaccination programme.

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